Solomon Holdings Ltd entered into an agreement with Kostal Sporting Goods Supplies Inc. The agreement provided a formula for calculating monthly rent based on a combination of the market value of the premises and the net profit generated by Kostal's sale of sporting goods. The document also contained the following provision:

Kostal shall have exclusive possession of the premises for a single five-year period commencing the first day of January in the next calendar year.

The agreement proceeded as planned. At the end of the five-year period, however, Kostal remained in the premises and continued to pay rent according to the formula established in the agreement. Solomon received such payments for nearly three years without objection. Recently, however, Kostal has discovered an alternative location at a lower rental price. On the first day of July, it provided Solomon with written notice that it intended to vacate the premises by August 1. Solomon was generally agreeable to that proposal, but it insisted that Kostal was liable to pay rent for August, as well as July. Which party is correct? Explain your answer.